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How to determine SL on limit orders

  • #1
  • First Post: Mar 15, 2012 12:19am Mar 15, 2012 12:19am
Hello, I want to know if anybody could tell me on how to determine SL if we're using a limit order (buy limit or sell limit). For example, if we draw a Fib and we found a confluence on the chart but don't have the time to monitor how price react, I'd use a limit order placed on the confluence zone, however, I'm confused about the SL size (in pips) that I should give. I know where to put my SL if its an order following a certain reaction for example, a pinbar or an engulfing bar. But what about on a buy limit or sell limit orders? I'd appreciate any pointers
o que será, será
  • #2
  • Mar 15, 2012 5:36am Mar 15, 2012 5:36am
What's the problem? Spot some important support/resistance level and set your SL near it.
  • #3
  • Edited 7:59am Mar 15, 2012 7:59am | Edited 7:59am
Quoting Mist Gun
Hello, I want to know if anybody could tell me on how to determine SL if we're using a limit order (buy limit or sell limit). For example, if we draw a Fib and we found a confluence on the chart but don't have the time to monitor how price react, I'd use a limit order placed on the confluence zone, however, I'm confused about the SL size (in pips) that I should give. I know where to put my SL if its an order following a certain reaction for example, a pinbar or an engulfing bar. But what about on a buy limit or sell limit orders? I'd appreciate...
In my humblest of opinions, look at Sam Seiden's work and you have an amount for a hard stop loss.
  • #4
  • Mar 16, 2012 12:56am Mar 16, 2012 12:56am
Thank you, I'll look into Sam Seiden's work.
o que será, será
  • #5
  • Mar 16, 2012 11:25am Mar 16, 2012 11:25am
Quoting Mist Gun
Hello, I want to know if anybody could tell me on how to determine SL if we're using a limit order (buy limit or sell limit). For example, if we draw a Fib and we found a confluence on the chart but don't have the time to monitor how price react, I'd use a limit order placed on the confluence zone, however, I'm confused about the SL size (in pips) that I should give. I know where to put my SL if its an order following a certain reaction for example, a pinbar or an engulfing bar. But what about on a buy limit or sell limit orders? I'd appreciate...


If you have researched this method (and I hope you have) then you will have a rough idea of the expected reward/risk ratio. Assuming that you know not to trade into obvious strong support or resistance, then your stop loss (and your take profit, probably) will be a function of the expected movement of a pair on any given time frame. The best tool to use for this is the ATR or average true range. You need to back test your strategy testing various fractions or multiples of the ATR(14), say, and set up your trades accordingly. With a sufficient sample you might even be able to calculate a rough expectancy figure for your strategy.
Gone to a better place
  • #6
  • Mar 17, 2012 11:04am Mar 17, 2012 11:04am
From one newb to another..the cooloest thing I have run into this far is xmans channel indy. Not only does it do proper channels for you (most of the time), it teaches you how these work.... I haven't turned it off since I installed it. Of course, s/r levels, going with the trend and the time of day you are trading are key also.
Attached File(s)
File Type: mq4 Sonic SHI Channel MTF (1).mq4   9 KB | 272 downloads
  • #7
  • Last Post: Mar 18, 2012 8:21am Mar 18, 2012 8:21am
Please, where can we found Sam Seiden's work ?
Have you got a link ? is it on this forum ?
Thanks
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